BUSINESS STRATEGIES
There is a lot that needs to be done to get to the said “ future state ,” whatever that looks like , but we know Rome wasn ’ t built in a day .
Which path from page 22
The fear in adopting new technologies needs to be cleared away . Thoughts of being replaced or marginalized need to be put aside . There will undoubtedly be new competitors that will emerge , and in response to that , you need to arm yourselves with the tools and partners necessary to stay relevant . Some organizations have decided to take advantage of the recent wave of private equity acquisitions from the likes of Integrity or Simplicity to integrate and leverage resources . Others will need to find alternative ways of enhancing their businesses and staying on the forefront of these developments .
I spoke with Marty Schafer , Chief Distribution Officer at Ethos Life , about what they are doing to help the industry embrace technology and improve their businesses . Ethos works with BGAs and their agents to develop a term insurance , whole life , and final expense offering with a proprietary platform utilizing their own underwriting parameters and customized products .
Term insurance is a great way to insure millions of Americans ; however , it usually is the least profitable business line for an agency . Schafer referred to it as removing a primary resource drag from an agency . “ There is zero desire for us to disintermediate agents , BGAs , and agencies , but to partner with them . Third-party distribution is central to our growth strategy ,” explained Schafer .
Future state
When we spoke of the future state , that is where things get interesting . Where could things go with a partnership-driven technology model like theirs ? I think the obvious expansion is into permanent insurance products applied to non-complex life insurance sales . A standard , overfunded IUL or VUL policy for a young , healthy , high-earning adult comes to my mind . Schafer expressed an interest in more fully guaranteed solutions within the realm of GUL , IUL , and VUL where the agents and BGAs remain integrated and paid . This type of solution would continue to reduce the resource drag at the agency level , allowing them to focus on the complex life insurance structures that HNW clients demand , while also respecting the best use of their time .
Nurturing the roads already paved
Regardless of what exactly gets integrated into the future platforms , it needs to fit within the well-thought-out foundations that are already built . New digital organizations have invested heavily in perfecting their agent portal , which is fully expandable to downline agents and organizations . They need carrier partners who understand their model and are willing to adjust their products and integrate their underwriting . Digital platforms need to continue to nurture the inroads that have been made with institutional wire-houses , independent broker-dealers , and RIAs . Especially when it comes to registered products , such as VUL , the integration of the suitability or best interest parameters need to be carefully inserted . There is a lot that needs to be done to get to the said “ future state ,” whatever that looks like , but we know Rome wasn ’ t built in a day . These digital platforms are welcomed catalysts for change that this industry needs desperately .
We know that the distribution of life insurance is going to mold into something different . It isn ’ t something to fear , but to embrace . The question is , what is your plan to embrace it ? Our mutual goal is to find a better way to educate consumers on the value of life insurance , improve access and ease-of-issue , and ultimately increase the number of families that have coverage . Leveraging technology and reducing resource drag on your agency is a means towards reaching that goal . When firms like Ethos reach their future state , I think it will help propel the life insurance industry to extraordinary heights while preserving , and even enhancing , the value of the human element insurance professionals bring .
Fear in adopting new technologies needs to be cleared away . Thoughts of being replaced or marginalized need to be put aside … you need to arm yourselves with the tools and partners necessary to stay relevant .
24 Perspectives Q3 2022